Equity funds do well under bear attack of January

Among the best-performing fund houses was Reliance, JM continues to be the laggard in the pack

In January, the Indian markets came under a bear attack, when the Sensex and the S&P CNX Nifty fell by 11% each.

However, equity mutual funds on the whole did better than their respective benchmarks.

Out of the 228 equity growth schemes, 118 have outperformed; 82 schemes have underperformed and 26 schemes have just about managed to equal their benchmark returns.

The top-performing three schemes for January 2011 were-JM Core 11, Reliance Natural Resources and Reliance Small Cap. JM Core 11 fetched a return of -4%, while its benchmark was down 11%. Reliance Natural Resources and Reliance Small Cap fetched returns of -5% and -8% ((benchmark return of -10% and -12% respectively).

Among the top performers of January 2011 were nine funds from Reliance Mutual Fund-Equity Advantage, Equity, Reliance Growth, Natural Resources, NRI Equity, Quant Plus, RSF, Small Cap and Reliance Vision. They suffered an average loss of -8% and have beaten their benchmarks by 3%, on an average.

If Reliance was the best fund house, JM's funds continued to destroy investors' wealth, barring one fund, the JM Core 11, which was a top performer for January, in our current analysis. This is not a surprise.

As we pointed out in our article in Moneylife (1 July 2010), JM is indeed the worst fund house by any parameter.

Among the 20 worst-performing schemes over past one month, JM has as many as ten. These include Agri & Infra (-13%), Basic (-15%), Contra (-14%), Emerging Leaders (-16%), Equity (-12%), Hi-Fi (-13%), Large Cap (-11%), Mid Cap (12%), Multi Strategy (-13%), Small & Mid-Cap (-13%).

The others in the bottom 20 were ICICI Prudential Emerging STAR (-13%), Taurus Discovery (-12%), Birla Sun Life India Reforms (-12%), SBI Magnum Multiplier Plus 93 (-12%), Birla Sun Life Mid Cap (-12%), Kotak Midcap (-13%), Principal PNB Long Term Equity (-13%), ICICI Prudential Equity Opportunities (-12%), Sahara Star Value (-13%), HSBC Midcap (-15%), Sundaram Rural India (-14%), HSBC Progressive Themes (-14%), SBI Magnum Sector Umbrella-Emerging Businesses (-14%).

Out of the various schemes in this category from the Tata stable, the only underperformer of the lot was Tata Equity Opportunities Fund (-12% underperformance with respect to its benchmark).

Source: http://www.moneylife.in/article/equity-funds-do-well-under-bear-attack-of-january/13858.html